Union Membership Strikes Seven-Year Low

February 26, 2003 (PLANSPONSOR.com) - Union membership last year took its biggest drop since 1995, as the effects of private sector cost cutting caught up with organized labor's rolls.

The number of union members fell 1.7% in 2002 to about 16.1 million, or 13.2% of the workforce, as companies in union-heavy sectors struggled to cut costs and boost productivity by operating with fewer workers.   This represents a decrease from 16.4 million American workers, or 13.4% of the total workforce being represented by unions in 2001, according to a Wall Street Journal report.

Unionized workers also faced sharp wage and benefit concessions in addition to changes in work rules.   Further, there are hints that even more concessions may be ahead.   In the troubled airlines industry, union workers are now facing double-digit wage cuts. Additionally, unions in the trucking industry saw companies with workers represented by the Teamsters win more-relaxed work rules in order to compete with less restricted, nonunion firms.

The bright spot for organized labor was the public sector, where union membership rose 2.3% to about 7.4 million workers. However, that increase did little to dent the 4.8% drop in the number of union workers in the private sector.

Notable in the private sector declines was manufacturing, where union members fell nearly 8% to 2.5 million workers. Not surprisingly, the United Steelworkers of America’s membership took big hits, as steelmakers rushed into courts to file for Chapter 11 bankruptcy-court protection. Likewise, organized labor in the capital-goods sector saw membership fall, as businesses cut capital-investment spending, prompting manufacturers to make layoffs.